Saregama India Ltd. share price target

Saragama's strong headline numbers masked the weakness in music licensing revenue. Consolidated revenue grew 40.3% YoY, aided by strong growth in the video segment.

We attended Saregama’s analyst meet (as part of RPSG investor day) where the management reiterated its revenue guidance (excluding Carvaan) of 25-26% over the next 3 years.

Saregama delivered impressive revenue growth of 28.8% QoQ, aided by
improved performance in the Music and Video segments (including the Pocket
Aces acquisition).

Playing the growth tune

On the ex-date i.e. starting today (April 26, 2022), the stock price has adjusted for stock split ratio at ~| 450/share i.e. one-tenth the closing price on April 8, 2022 (| 4496/share)...

The scheme does not involve cash consideration and existing shareholders will receive two fully paid up equity shares of | 10 each of the resulting company (Digidrive Distributors Ltd), credited as fully paid up, for every one...

Revenues were up ~37% YoY to | 105 crore, on a benign base (~39% decline in Q1FY21) with growth led by the music segment, which was up 32% YoY. Carvaan sales volumes were up ~200% YoY (down 59% QoQ) to...

Saregama India's revenues for Q4FY21 increased 13.6% YoY to | 123.5 crore with growth led by the TV & films segment, which was up 27.8% YoY. Carvaan sales volumes were up ~49% YoY to 110,000 units in Q4FY21, on a depressed base. EBITDA grew 59.9% YoY (down 14% QoQ) to | 34.4 crore with EBITDA margin at 27.8% (up 806 bps YoY and down 205 bps QoQ, respectively). Cost reduction, mainly in promotion costs for Carvaan and lower other expenses (lack of new content), led to strong growth in operating profit YoY. Subsequently, reported PAT was at | 37...

Saregama India's revenues for Q3FY21 increased 3.4% YoY to | 133.9 crore with growth being led by TV & films segment (Q3FY20 revenue was also impacted due to dip in Carvaan sales). Carvaan sales declined ~30% YoY to 138,000 units in Q3FY21. EBITDA grew 193% YoY to | 40 crore with EBITDA margin at 29.9%. Cost reduction across all fronts (except for TV & films production), mainly in promotion costs for Carvaan and other expenses led to strong growth in operating profit. Subsequently, reported...

Saregama India's revenues for Q2FY21 fell 31.3% YoY to | 108.1 crore as Carvaan sales declined to 81,000 units vs. 250,000 in Q2FY20. EBITDA, however, was at | 36.9 crore, up 52.3% YoY, due to lower promotion costs (high marketing expense in base quarter) and contract manufacturing...

Saregama India's revenues for Q1FY21 fell 39.2% YoY to | 76.5 crore due to Carvaan sales declining to 15,000 units vs. 219,000 in Q1FY20 as retail stores were shut during lockdown. EBITDA came in at | 18.9 crore, up ~16x YoY, due to lower promotion costs (high marketing expense in base quarter) and reduced production costs and contract manufacturing charges with EBITDA...

Saregama India's topline for Q4FY20 declined 14.3% YoY to | 108.7 crore as Carvaan sales fell to 74,000 units in Q4FY20 vs. 214,000 in Q4FY19, mainly due to no corporate buying and lockdown impact in March. EBITDA came in at | 21.5 crore, up 32% YoY, due to lower contract manufacturing charges & marketing costs. EBITDA margins at 19.8% were up 690 bps YoY....